Argos hit by 'difficult' consumer electronics market in early 2015

Like-for-like sales dropped five per cent during January and February this year
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Argos has reported a five per cent dip in like-for-like sales during the eight weeks ending February 28th, partly due to a 'difficult consumer electronics market'.

Total sales during the short period declined four per cent to £505 million.

"This trading performance was in part due to annualising a five per cent like-for-like sales growth in the same period last year, together with the impact of a more difficult market in a number of consumer electronic product categories," the retailer said in a statement.

"Furthermore, in the period we began to prioritise improved customer experiences following the rapid introduction of extensive new capabilities in prior periods. Taken together, these factors may continue to impact sales momentum in the next couple of quarters."

For the full-year, like-for-like sales rose by 0.6 per cent. The number of Argos stores rose by 21 to 755 in the year. This increase comprised a total of 30 new stores which included 20 Argos digital concessions within Homebase and seven new small format digital stores, partially offset by nine store closures.

Mobile commerce grew by 38 per cent during the year to represent 25 per cent of total Argos sales. 

John Walden, chief executive of Argos' parent Home Retail Group, commented: "We are pleased to have delivered another full-year of like-for-like sales growth in both Argos and Homebase. Although our sales performance was weaker in the final short trading period, we managed the business effectively during this period and achieved a good performance in both gross margin and costs. 

"As a result of this, we expect that Group benchmark profit before tax for the FY15 financial year will be towards the top end of the current range of market expectations of £120 million to £132 million.

"Argos continues to make good progress with its transformation plan. Over the plan's first two years we have delivered a significant amount of change and many new capabilities. However, it is important that we achieve an appropriate balance between the implementation of these new capabilities and ensuring good customer experiences.

"We are on track to deliver both the Argos Transformation Plan and the Homebase Productivity Plan over the next three years."

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